Budget impasse focuses on taxes vs. spending

Published
8:00 pm EDT, Saturday, June 6, 2009

HARTFORD

By SUSAN HAIGH

AP Political Writer

Raise taxes or cut spending?

It's the age-old question politicians have faced when trying to balance a budget.

And it's no different in Connecticut, where the Democratic-controlled General Assembly has gone into extra innings -- convening a special session one minute after Wednesday's midnight adjournment -- to try and somehow reach a deal with Republican Gov. M. Jodi Rell.

Their latest deadline is less than a month away. June 30 marks the end of the fiscal year. If there's not a budget by then, the governor will be forced to sign executive orders to keep the state running and decide which bills Connecticut can afford to pay.

But neither side -- majority Democrats or minority Republicans and Rell -- show signs of backing down from their respective positions.

"I think we're committed to saying, we can do this without raising taxes. That is the only thing, from my perspective, that is nonnegotiable," said Sen. Dan Debicella, R-Shelton, ranking Republican on the budget-writing committee.

House Speaker Christopher Donovan said everyone from the local library to people with developmental disabilities in his hometown of Meriden are e-mailing him, voicing their concerns about the ramifications of a no-tax increase budget.

"When I say to them, 'Hey, you're going to lose your job, you have to close the place down,' they don't want to do that," he said. "And I say, 'Hey, we could solve this by spreading out some taxes across the state,' they're saying 'Yeah, that's what we have to do."'

A March 10 Quinnipiac University Poll shows voters don't like the idea of raising taxes.

When asked if they think higher taxes are needed to balance the budget, 32 percent said yes while 63 percent said no. The survey of 1,238 registered voters had a survey error margin of about 3 percentage points.

But the state's fiscal picture has worsened since that poll was conducted.

Despite several midyear deficit-cutting plans, the current fiscal year is expected to end more than $900,000 in the red. The next two fiscal years are estimated to be as much as $8.7 billion in deficit.

Rell originally offered a $38.4 billion, two-year plan in February, but recently reduced it to $37.2 billion. Her office believes the deficit is $7.9 billion. Democrats, meanwhile, offered up a $38.2 billion plan but did not have enough votes to pass it in the Senate. The Republicans have presented a $37.2 billion package.

A group of select lawmakers and the legislature's and governor's budget offices have been negotiating for weeks behind closed doors, trying to pick and choose from each of those proposals, but the talks have recently become somewhat sporadic. They haven't met since the legislative session ended on Wednesday.

"We're just very far apart," said Sen. Toni Harp, D-New Haven, co-chairman of the Appropriations Committee. "I think that for all of us, it has been very difficult to recognize the revenue shortfalls that we've had and to figure out how to deal with those."

Harp is of the mindset that higher taxes are necessary.

She said lawmakers originally thought they could solve budget shortfall with federal stimulus money. When that wasn't enough, they turned to state employee concessions. Now that Rell has put some new spending cuts on the table -- many of which the Democrats consider too draconian -- Harp said it's clear that cuts alone won't solve the problem either.

"We've got to find a way to raise some revenues and there is no will to do that," she said.

Sen. Robert Duff, D-Norwalk, one of the Senate Democrats who didn't support his caucus budget because it raised taxes an estimated $3.3 billion over two years, said he hopes to play a role in the negotiations as they move forward.

He wants to help find a middle ground.

"For me, it's all about the long-term health of the state of Connecticut," Duff said. "We've got to make sure we preserve key industries and jobs in the state, and we're a welcoming place for business and also the people in this state."